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Exhibit 10.25
Xxxxxxx & Co.
Report on Form 10-K
Fiscal 1998
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
This Agreement was originally made effective the 31st day of December 1989
by and between Xxxxxxx and Company, a New York corporation with its executive
offices and principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Tiffany") and Xxxxxxx X. Xxxxxx who resides at 00 Xxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxx ("Executive") and subsequently amended the 8th day of February 1999.
Whereas, Executive is employed by Tiffany in the capacity of Chairman of
the Board;
Whereas, Xxxxxxx and Executive were parties to a Employment Agreement
dated as of the 1st of October, 1984 (the "Prior Agreement") the term of which
Prior Agreement has expired;
Whereas, under Section 3 of the Prior Agreement Executive was entitled,
upon termination of his employment with Tiffany, to distribution of certain
amounts maintained on the books of Tiffany as a liability to Executive (the
"Deferral Account");
Whereas, as of the last business day of the calendar quarter ended
September 30, 1989 the Deferral Account consisted of a liability to Executive of
$610,225.13 inclusive of accrued interest to that date computed in accordance
with the terms of the Prior Agreement; and
Whereas, Executive is not entitled to participate in the Xxxxxxx and
Company Pension Plan.
NOW THEREFORE, in consideration of the foregoing premises and the
continued service of Executive to Tiffany, the parties hereby agree as follows:
1. Principal Credit to Deferral Account. While this Agreement remains in
effect, as of the last day of each calendar quarter Tiffany shall credit to the
Deferral Account $25,000, provided that no further amounts shall be credited to
the Deferral Account after December 31, 1998.
2. Interest Credit to Deferral Account. Through December 31, 1998, as of
the last day of each calendar quarter Tiffany shall credit to the Deferral
Account an amount determined by multiplying twenty-five (25%) percent of the
Interest Rate by the amount credited, or, if greater, the amount required to
have been credited, to the Deferral Account as of the first day of such calendar
quarter. In the event that the entire balance credited to the Deferral Account
is paid on a date other than the last day of a calendar quarter, interest
prorated on the basis of the Interest Rate, shall be credited to the Deferral
Account through the date of such payment. For the purposes of this Paragraph 2.,
the "Interest Rate" shall be the annual interest rate announced by The Bank of
New York as
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the interest rate at which it will lend on an unsecured basis to its
prime commercial borrowers and in effect as of the first business day of the
calendar quarter with respect to which interest is then being credited.
3. Nature of the Deferral Account. Xxxxxxx credited to the Deferral
Account shall be unfunded and unsecured liabilities of Tiffany to Executive,
payable only as provided in this Agreement, shall remain part of Xxxxxxx's
general assets and shall be subject to claims of creditors of Tiffany in any
proceeding under the federal Bankruptcy Code to which Tiffany is subject as a
debtor and in any other proceeding before a court of competent jurisdiction in
which Tiffany is adjudicated or determined to be insolvent. Nothing contained in
this Agreement and no action taken pursuant to its provisions shall create or be
construed to create a trust of any kind or fiduciary relationship between
Xxxxxxx and Executive. To the extent Executive or any person acquires a right to
receive payments from Tiffany under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Tiffany. Xxxxxxx
credited to the Deferral Account shall be payable as they become due under the
terms of this Agreement irrespective of any actual investments Xxxxxxx xxx make
to meet its obligations or to accumulate funds. Neither Tiffany, nor any trustee
(in the event Tiffany elects to use a grantor trust to accumulate funds) shall
be obligated to purchase or maintain any asset or investment for the purpose of
meeting its obligations hereunder.
4. Designation of Beneficiary. Executive may, by an instrument in writing
delivered to Tiffany, designate one or more beneficiaries to receive the amounts
payable after his death under the terms of this Agreement and may change or
revoke such a designation by like notice; failing an effective designation of
such a beneficiary or beneficiaries, such amounts shall be payable on
Executive's death to the legal representative of Executive's estate.
5. Spendthrift Provision. The interest of Executive or any beneficiary
receiving payments hereunder shall not be subject to anticipation, nor to
voluntary or involuntary alienation until distribution is actually made. Neither
Executive nor any beneficiary shall have any right to commute, sell, transfer,
assign or otherwise convey the right to receive any payment under the terms of
this Agreement. Any such attempted assignment shall be considered null and void.
6. Distribution.
(a) In the event Executive dies before February 1, 1999,
distribution of amounts credited or required to have been credited
to the Deferral Account shall, as soon after Executive's death as
practicable, be made in a lump sum to Executive's beneficiary as
designated or otherwise determined pursuant to Paragraph 4. above.
(b) If Executive is living on February 1, 1999, distribution of
amounts credited to the Deferral Account shall be made as follows:
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(i) using an interest rate of 8% per annum, compounded monthly
(the "Discount Rate"), and Executive's life expectancy as of
February 1, 1999 expressed in integral years as derived from
the table entitled "Table V-Ordinary Life Annuities-One
Life-Expected Return Multiples," promulgated under section
1.72-9 of the Federal Income Tax Regulations, as in effect on
the date of such determination (the "Life Expectancy"), an
annuity payable monthly to Executive shall be calculated as
the monthly payment necessary to amortize the balance credited
to the Deferral Account (or required to have been credited to
such account) as of the date of such termination (the "Lump
Sum Value") by application of the Discount Rate to the Lump
Sum Value over the Life Expectance (the "Annuity Payment");
(ii) the Annuity Payment shall be paid by Tiffany to Executive
on the first day of each month if Executive is living on that
date commencing with March 1, 1999;
(iii) if, on the death of Executive, the aggregate of Annuity
Payments actually made to Executive is less than the Lump Sum
Value, any difference between the Lump Sum Value and such
aggregate of Annuity Payment shall be paid to Executive
beneficiary as designated or otherwise determined pursuant to
Paragraph 4. above.
7. Term and Termination Agreement. This Agreement shall remain in effect
until Tiffany has completed its payment obligations under Paragraph 6. above.
8. Adverse Determination. Notwithstanding anything stated to the contrary
in this Agreement, if at any time, as a result of a Final Determination, a tax
is payable by Executive, his beneficiary or his estate in respect of any amount
credited to the Deferral Account prior to payment under the terms of this
Agreement, then Tiffany shall pay to Executive the amount of such tax and the
Deferral Account balance, or, in the event Annuity Payments are then being paid,
future Annuity Payment, shall be reduced by the amount of such tax. For the
purposes of this Section 9., the term "Final Determination" means (i) an
assessment of tax by the United States Internal Revenue Service addressed to the
Executive or his beneficiary which is not timely appealed to the courts; (ii) a
final determination by the United States Tax Court or any other Federal Court,
the time for an appeal thereof having expired or been waived; or (iii) an
opinion by Xxxxxxx's counsel, addressed to Xxxxxxx and in form and substance
satisfactory to Tiffany, to the effect that amounts credited to the Deferral
Account are subject to Federal income tax to the Executive or his beneficiary
prior to payment under the terms of this Agreement. No Final Determination shall
be deemed to have occurred until Tiffany has actually received
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a copy of the assessment, court order or opinion which forms the basis thereof
and such other documents as it may reasonably request.
9. Prior Agreement Merged. All provisions in the Prior Agreement in
respect of the Deferral Account are hereby superceded and merged into this
Agreement. Executive and Tiffany agree that the amount credited to the Deferral
Account stated in the fourth Whereas clause above is correctly stated as of the
date therein stated.
10. Obligations to Survive Termination. The obligation of Tiffany to pay
amounts credited or required to be credited to the Deferral Account pursuant to
this Agreement and the provisions of Paragraph 3. through 6. and 8. through 12.
shall survive the termination of this Agreement.
11. Miscellaneous Provisions. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries and personal representatives. Notices hereunder
shall be deemed effectively given: (a) when mailed, by registered mail, return
receipt requested, from a post office in the United States to the following
addresses:
If to Executive:
Xxxxxxx X. Xxxxxx
00 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
If to Tiffany:
Xxxxxxx and Company
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Legal Department
or (b) when hand delivered, in the case of notices to Executive, to Executive,
or, in the case of notices to Tiffany, to the Corporate Secretary of Tiffany.
This Agreement shall be governed by and construed, enforced and administered in
accordance with the laws of the State of New York. In the event either party
shall be required to resort to judicial process in order to successfully enforce
this agreement in accordance with its terms or otherwise to remedy a default
under this Agreement, the defaulting party shall pay to the non-defaulting party
the latter's attorneys' fees and other costs of enforcement. In the event that
any sums required to be paid hereunder are not paid within ten (10) days of
written demand for payment, Executive shall be entitled to be paid interest at
the Interest Rate by Tiffany upon such unpaid amount until such amount is paid
in full.
12. Continuance of Employment. This Agreement shall not confer upon Executive
any right with respect to continuance of employment with Tiffany, nor shall it
interfere in
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any way with the right of Tiffany to terminate his employment at any time with
our without cause.
IN WITNESS WHEREOF, this amended and restated Agreement has been duly executed
by the parties hereto effective as of January 31, 1999.
Xxxxxxx and Company
("Tiffany")
BY:
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Xxxxx X. Xxxxxxxxx
Executive Vice President - Chief
Financial Officer
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Xxxxxxx X. Xxxxxx
("Executive")
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